‘You Have To Dominate’

‘You Have To Dominate’

After six days of social unrest which turned decisively violent over the weekend, Donald Trump held a video call with governors and law enforcement on Monday.

Considering frayed nerves and the fact that the president was forced to spend almost an hour in an underground bunker on Friday evening when protesters descended on the White House, hurling stones and attempting to breach police barricades, you’d be inclined to think Trump would at least consider adopting a conciliatory stance.

Alas, that was not the message.

Read more: Cultural Breaking Point Threatens To Upend Fragile US Economy At Worst Possible Time

Instead, he instructed state and local officials to “dominate”.

“If you don’t dominate, you’re wasting your time. They’re going to run over you, you’re going to look like a bunch of jerks. You have to dominate and you have to arrest people and you have to try people”, Trump said, on a recording of the call obtained by multiple news outlets.

“We’re strongly looking for arrests, we do have to get much tougher, you’re going to get overridden”, he added, threatening to “activate” Bill Barr, as though the attorney general were a battery-powered enforcer.

At the risk of stating the obvious, this is an ill-advised approach. Trump’s brazenness is almost guaranteed to embolden protesters, and now, his remarks will be cited in the event someone is injured or worse. (And that includes America’s law enforcement community, many of whom sympathize with the general message of the demonstrators, even as they’re obliged to protect property.)

Trump’s efforts to cast himself as a “law and order” president (he tweeted the three words in all-caps over the weekend) are undermined by his long history of antagonist rhetoric, which has (rightly or wrongly) been blamed for sowing domestic discord and deepening societal rifts.

By contrast, Andrew Cuomo struck a measured tone during his daily media briefing. Violence “obscures the righteousness of the message”, Cuomo said, of demonstrators who resort to theft and non-peaceful forms of protest. “It plays into the hands of people and forces who don’t want to make changes”. You’d be forgiven if you suggested that was an oblique reference to Trump and Barr.

The problem is that these protests are the direct result of excessive force by police, and now Trump is explicitly calling for more force. Barr directed the Bureau of Prisons to dispatch riot teams to Washington and Miami, for example. That’s according to ABC, which cited an unnamed Justice department official.

As documented here over the weekend, it’s too early to say whether property damage, store closures and delayed reopenings due to the protests will have a material effect on the economy, but they certainly do not help.

This comes at a time when analysts and other commentators are becoming increasingly comfortable with optimistic takes on the recovery and risk assets.

“Our view has been that this recession would be sharper but shorter. However, even we have been pleasantly surprised by incoming growth data and policy actions”, Morgan Stanley’s Chetan Ahya said over the weekend.

(Morgan Stanley)

“These upside surprises are increasing our confidence in a deep V-shaped recovery”, he went on to muse, adding that “in the US, consumer activity… has been surprisingly strong [with] credit card transactions data tracking small business activity indicat[ing] that sales are now growing at 5%Y versus declines of ~30%Y seen just a few weeks ago”.

And then there was Bloomberg’s Cameron Crise. “One might ask why stocks should care about the protests. After all, equities went nowhere during the 1968 Democratic Convention which featured then-shocking scenes of unrest and confrontations with police, and rallied nicely for several months afterwards”, he wrote Monday, in a piece called “Stocks Yawn Despite Grim Headlines”.

According to his LinkedIn profile, Crise graduated from Duke in 1993, a quarter-century after the unrest he describes.

To be fair, he does add that back then (i.e., in a period he cannot possibly remember), “the economy was not in the midst of a brutal contraction, and there was no unfortunate tail risk that mass gatherings could re-ignite a second wave of pandemic infections”.

Not all market observers are taking a sanguine view of things.

Nomura’s Charlie McElligott, for example, called the events that transpired over the weekend in the US “heartbreaking”.

“Everywhere you look, decades are happening in weeks”, Rabobank’s Michael Every wrote, in his daily missive.

“Are they taking us towards US collapse or renaissance?”, he went on ask.

Referencing the push towards burden-sharing in Europe, Every wondered if the joint-debt proposal is taking the EU closer to “solidarity or division?”

And in Asia, where the politics of Chinese hegemony are center stage, Every asked whether we’re moving “towards a Chinese century – or very rapidly away from it?”

I’ll leave you with three short excerpts from AP’s coverage of Donald Trump’s brief visit to the basement.

Secret Service agents rushed President Donald Trump to a White House bunker on Friday night as hundreds of protesters gathered outside the executive mansion, some of them throwing rocks and tugging at police barricades.

Trump spent nearly an hour in the bunker, which was designed for use in emergencies like terrorist attacks, according to a Republican close to the White House who was not authorized to publicly discuss private matters and spoke on condition of anonymity. The account was confirmed by an administration official who also spoke on condition of anonymity.

The abrupt decision by the agents underscored the rattled mood inside the White House, where the chants from protesters in Lafayette Park could be heard all weekend and Secret Service agents and law enforcement officers struggled to contain the crowds.


17 thoughts on “‘You Have To Dominate’

  1. I do wonder where these optimistic analysts live, which is where they are presumably located while working from home.
    Suburban Connecticut, the Hamptons, Laguna Beach or other luxury communities? At least when they had to work in the office they were forced to travel on mass transportation, thru Grand Central or drive thru parts of inner cities- where they could catch a glimpse of what was really going on outside the wealthiest of communities.
    Are they basing their analysis on computer screens full of data and TV coverage or are they walking “main street” and talking to business owners about the reopening of restaurants and retail stores with respect to the reopening of economy and the now the added cost/setback from “protesting”?
    The view from the beach or the mountains still looks pretty good.

    1. I believe the correct phrasing is “grab ’em by the …”

      The realty tv star/somewhat accomplished self promoter has turned the Presidency into a realty tv show.

      One day, during a future “boring” Presidency, some may look back and wonder “how did we survive?” and some may look back and miss the dark comedy of it all. I may be among the latter…

  2. “Trump’s efforts to cast himself as a “law and order” president …… are undermined by his long history of antagonist rhetoric”

    Ha! Not to mention his own behavior. This is really rich. If anyone considers himself above the law, it’s Trump.

  3. As he was sitting in the basement did he ponder what some of the 1%ers have been doing in some seminars?
    “If the world as we know it is in upheaval to the point of Bunker/MegaYacht why does crew/security op have to accept me as leader?”
    In a small clan or tribe does paper wealth have value?

  4. It is as if our society has descended to the level of where a Star Trek episode “The Gamesters of Triskelion” has become apropos. Disembodied “Providers” possessed of unlimited currency wager their quatloos on the life and death struggles of Thralls whom they nourish and train only for the thrill their slaves’ death matches engender.

    1. Let’s hope that there is a clear distinction in who the winner is in both the popular vote and electoral college, regardless of which of the two individuals comes out ahead.

  5. He’s till got a way to go to catch up with Putin and Xi Jinping. I mean, how embarrassing to have one of your tanks hijacked. Paton would have a fit.

  6. Barr is one scary dude. Once in an interview he was asked if he was concerned about his legacy. His response was, ‘no one lives forever’. He went on to clarify that with he did not care because he was in his 50’s and would not likely live long anyway. That fits at least one definition of psychopathy.

  7. I generally think investors ignore civil unrest because it doesn’t materially impact corporate earnings. However, if Trump invokes the Insurrection Act to sends large numbers of active duty troops to occupy American cities, I may reconsider.

  8. On past occasions Trump has backed down, most evidently in his trade war with China. So you’re probably right. However, as he gets more desperate and cornered, his instinct for self-preservation may fail him. He may also be bidding farewell to reason.

    Anyway, I think the investor’s best approach for right now is to keep on whatever strategy you’re on, while having some pre-planned trades ready if the unthinkable happens.

    1. ‘bidding farewell to reason’ That seems to be a hallmark a of Trump business experience. Then attempts to recover by any and all means possible.

      I agree with you, jyl, on the best investment approach.

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